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europe-72

NEWS - ASIA, MIDDLE EAST & AFRICA
ACCC concernED over Caltex’s China deploys aggressive mandates to take lead in eVS
$95m Milemaker acquisition
Caltex Australia’s $95 million deal to buy
Victoria’s Milemaker Petroleum has run into
trouble with the competition regulator, which
is worried it may cut competition of petrol
supply in Melbourne and force up prices.
The takeover of the independent chain of 46
sites “may remove a vigorous and effective
competitor in retail fuel in Melbourne,” Rod
Sims, chair of the Australian Competition
and Consumer Commission said. Caltex
said it is “working with the ACCC with a view
to addressing the preliminary issues” raised
by the regulator and it is “confident” of meeting
the concerns. But Mr Sims signalled the
regulator’s objections to the deal may not
be easily overcome. “We’ve put out a statement
of issues which always means whether
or not we seek to oppose the merger is yet
to be decided,” he told The Australia Financial
Review. “In this case that’s a particularly
finely balanced question.” Mr Sims’ wariness
about the deal was welcomed by motorist
representative RACV, which said its analysis
showed Milemaker sites had consistently
lower prices than average in their area. Mr
Koenders said that while the ACCC’s concerns
“seem valid”, Caltex should be able to
make concessions to appease it, involving
potentially a guarantee to keep Milemaker’s
existing pricing strategy or by making
“minor” store divestments. The obstacle for
the acquisition has emerged as the ACCC
has started examining a much larger deal,
BP’s proposed $1.8 billion takeover of Woolworths’
fuel retail network, a transaction that
is expected to involve significant competition
issues. If the deal completes, Caltex
would lose a major fuel sales contract with
Woolworths. Citi’s Mr Koenders said that
ironically, the ACCC objecting to the Milemaker
deal could be good for sentiment
around Caltex because it would be difficult
for the regulator to then allow BP to acquire
the Woolworths network, in which the wholesale
supply agreement would continue. The
ACCC has tended to take a particular interest
in competition and pricing in petrol,
with Mr Sims having expressed concerns
that the market is already very concentrated
among a few major players. The deal on
Milemaker, a Caltex franchisee, is one of the
smaller acquisitions targeted by Caltex after
being beaten by BP for the Woolworths
network on price. Independent sellers play
a vital role in tempering fuel prices as they
are typically slower to increase prices and
quicker to bring them down. The ACCC has
invited parties to respond to the issues with
a final decision to be announced on April 20.
China is throwing its policy toolbox wide
open in an all-out effort to sustain leadership
in electric vehicles and to make sure
that Chinese companies win a dominant
share of future EV sales. The City of Beijing
announced plans this month to transform its
entire taxi fleet to electric propulsion. Within
5 years, electric cars and SUVs will replace
the 70,000 gasoline and diesel-fueled taxis
now cruising the streets of the capital. Beijing
is not the first city to mandate electric
taxis. Shenzhen, the booming tech city of
10.8 million across the border from Hong
Kong, declared that all new taxis entering
the fleet will be electric. The changeover
starts this year. China is already the world’s
leading electric vehicle market by a wide
margin. In 2016, China EV sales reached
507,000 units, more than double the level
in Europe (221,000) and almost four times
the US number (157,000). China EV sales
are expected to climb to 700,000 this year,
according to the China Association of Automotive
Manufacturers. China is making success
in electric vehicles a national priority
for three reasons: to reduce dependence on
foreign oil, to improve air quality and to take
leadership in a key emerging technology.
Saudi Aramco to invest nearly $7 Billion in Malaysia
Saudi oil giant Aramco will buy an equity
stake in Malaysian firm Petronas’ major refining
and petrochemical project, the companies
announced this month, pumping in $7
billion in its biggest downstream investment
outside the kingdom. The deal will boost
Aramco’s downstream business ahead of a
planned initial public offering next year and
also bolsters Malaysia’s state-controlled
Petroliam Nasional Bhd - known as Petronas
- after it cut spending because of the slump
in oil prices. In a joint statement, the firms
said Aramco will take a 50 percent stake in
select ventures and assets in the Refinery
and Petrochemical Integrated Development
(RAPID) project developed by Petronas.
The deal signing was witnessed by Malaysian
Prime Minister Najib Razak and Saudi
King Salman on a state visit to Malaysia - the
first in over a decade.“Malaysia offers tremendous
growth opportunities and today’s
agreement further strengthens Saudi Aramco’s
position as the leading supplier of
petroleum feedstock to Malaysia and Southeast
Asia,” Aramco will supply up to 70 percent
of the crude feedstock requirement of
the refinery, with natural gas, power and other
utilities to be supplied by Petronas.
Mozambique to get $350m in taxes from Eni-Exxon deal
Mozambique will get $350 million in capital
gains tax from Eni after the Italian oil and gas
company agreed to sell a stake in a gas field
to Exxon Mobil Corp, a senior tax official
said this month. Exxon, the world’s biggest
publicly traded oil producer, agreed earlier
this month to pay Eni $2.8 billion for a 25%
stake in a Mozambican gas field. Eni is currently
the operator of Mozambique’s Area 4
licence which is one of the world’s largest
gas discoveries in recent years. The deal
offers Mozambique the chance to transform
itself from one of the world’s poorest countries
into a global LNG exporter.
Zera to deal with unlicensed fuel dealers in Zimbabwe
The Zimbabwe Energy Regulatory Authority
is crafting Petroleum Liquid Fuel Licensing
and Compliance Regulations that will deal
with illegal fuel vendors that operate in Mutare
and surrounding areas, Energy deputy
minister Tsitsi Muzenda said in 2016 a total
of 14 unlicensed fuel dealers were closed
and 24 illegal fuel dealers set for prosecution.“
Zera conducted a fuel retail inspection
and noticed an increase in illegal fuel
deals in Mutare and areas in proximity with
the town, down into Mozambique, where
relatively cheaper fuel is brought into Zimbabwe,”
Muzenda said. “To curb the illegal
activities, Zera, working with the Zimbabwe
Republic Police (ZRP), carried out routine
inspections which showed 35% of fuel retail
sites were unlicensed and were operating
from former commercial industrial sites with
no clearance from Mutare City Council, Fire
Brigade or Zera, and these were manned by
untrained people,” she said. Muzenda said
even after some of the illegal fuel dealers
were arrested, the illicit practices worsened
with the dealers temporarily deserting their
sites only to return later. Muzenda said the
Petroleum Liquid Fuel Licensing and Compliance
Regulations, once crafted, would
propose stiffer penalties for offenders.“Zera
will prosecute for all fuel that is unmarked or
which is marked with a diluted marker because
it will be illegal fuel and those caught
will be referred to Zimra for assessment and
made to pay duty for the fuel.
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